Hello traders, I am Stephen Davis. Senior Market Strategist, RJOFutures. It's Friday here as we wind down the end of the month of August, here to talk to you about the grain markets.

Corn Market

We'll start with the corn market. I really thought the Pro Farmateur this week would bring a little more volatility into the market, and we're really not seeing a lot of tweets like expected. Corn and soybeans are a little bit unchanged here this morning. Our first chart is corn here today, you can see last year, the last day of August, that's when corn bottomed. And we rallied 40 cents off of that from August 30th last year. Now, many times markets don't repeat, but they do rhyme, and a lot of clients are looking for when this corn markets going to bottom. We're getting down into very good support. I think exports are the key, we need to see this continue, sell our corn to the rest of the world. North American Free Trade Agreement, the agricultural trade that goes on here in North America and our neighbors to the north, Canada, our neighbors to the south, Mexico, there's a lot of agriculture and a lot of corn being sold and we need to see this continue. We'll keep talking about that.

Soybean Market

You know it's been raining out here a little bit, you see the charts on corn are going down, the charts on soybeans are going up. Doesn't make a lot of sense here in the short term. All along here I've been saying I think the harvest lows are going to be put in early, so we'll kinda see where we go. Yesterday soybeans were up, soybean meal was up, soybean oil was up, and things were acting really good. We don't have a lot of followthrough here today. Exports again are key, we had a cancellation of US exports to China this week. China buys so much US soybean from us, once in a while there are cancellations. In the short term, it doesn't mean a negative for the market, but I think longer term China is going to continue to buy our US soybean. That's a positive story. Again, I think exports are really important here, the dollar has been trending lower and as we wrap up this harvest in the next month or two, I know that we're going to have a lot of grain to sell. We've got a lower currency and perhaps that's going to help. We'll keep talking about all of that.

Wheat Market

Again, our chart of wheat here, you can see really trending lower. There's a lot of wheat in the world. I think the key to the wheat market here is the Russian wheat, and if it can stabilize, that's going to help all of the wheat from other countries. Egypt, the biggest wheat buyer in the world today, they origin all of their wheat typically from Russia and the Ukraine, that part of the world. We're getting a lot of emails and social media comments on wheat, so it's good to hear from all of you. Some of you are thinking something is going to happen in the wheat market here, but this down draft in wheat is really weighing on corn as well. It's kindof hard with wheat going down for corn to trade higher. They are trading cousins here, so we'll keep talking about that. Monday night crop conditions, I think they're going to improve a little bit, we'll have to see. It doesn't look like a lot of rain next week, that's important for soybeans. This is a longer growing season. September 6th is the first full moon, and if we get an early frost, that's going to change things here production wise. And that can be bullish, so as we move into September we're going to talk more and more about that.

Stephen E. Davis is a 25-year+ veteran of the markets, who has been a retail broker with RJO Futures since 1998. He is a graduate of the University of St. Thomas in Minnesota and started as a runner at the Mid America Commodity Exchange in 1981. Davis' past experience involved working with firms Stotler Grain, O'Connor Grain, Dean Witter, R.J. O'Brien and Rosenthal Collins. His trading floor experience in agriculture and financial markets is the foundation of his brokerage approach. Throughout his career, he has worked with clients ranging from retail clients to some very large institutional clients. "My focus is on price and my philosophy is that chart patterns will show you where the big money is made," he says.

In his time as a broker, he has seen an evolution of the trading process. "As all of these markets move from the trading floor to the computer screen, we are all like locals on the trading floor-and we do not have to pay millions of dollars for our memberships." His advisory experience includes CQG, Moore Research, Dennis Gartman (The Gartman Letter), The Hightower Report, Financial Times and the Wall Street Journal.

This material has been prepared by a sales or trading employee or agent of RJO Futures and is, or is in the nature of, a solicitation. This material is not a research report prepared by RJO Futures Research Department. By accepting this communication, you agree that you are an experienced user of the futures markets, capable of making independent trading decisions, and agree that you are not, and will not, rely solely on this communication in making trading decisions.